The beginning of the week seems to bring an improvement in sentiment in the financial markets and thus a continuation of the growth of many stock exchange indices that started after the information about an effective coronavirus vaccine.
This morning, the largest upward movement of popular indices could be observed in the Nikkei 225. It increased by more than 2% and is getting closer to the levels observed recently 30 years ago. The Spanish Ibex seems to have grown by almost 2%. The German Dax, on the other hand, is growing at the beginning of the week by less than 0.5%. Futures contracts for American stock indices are also rising. One of the reasons for the growth in Asia, which also seems to be a positive sentiment in other markets, may be the signing by 15 economies in the region, including China, Japan and South Korea, of a historic free trade agreement that aims to gradually reduce tariffs in many areas.
Moreover, China's industrial production increased by 6.9% in October 2020 on an annual basis. This is the same as the September result, which means the biggest growth since December 2019. The market consensus was 6.5 percent. Retail sales in China grew by 4.3 percent year-on-year in October 2020. This was the third consecutive month of sales growth and the highest since December last year. This was the third consecutive month of sales growth and the largest since December last year.
On Monday, oil contracts also seem to be rising. WTI crude oil futures were at one point above $41 per barrel. The market seems to discount the fact that OPEC+ will maintain its current production limits, which in turn may compensate for the continuing fears of a short-term decline in demand for fuels and higher production in Libya.
OPEC+ countries have reduced production by about 7.7 million barrels per day and plan to increase production by 2 million barrels per day from January. At the same time, solid economic data from both China and Japan confirmed that Chinese oil refining increased to 14.14 million barrels per day in October, corresponding to the record level set in June. The OPEC+ ministerial committee is scheduled to meet on Tuesday and may recommend changes to production quotas when all ministers meet in late November.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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